Not many home loan borrowers understand the importance of getting the NOC after repaying the home loan. Read on to know more about its importance.
For most middle-class Indians, availing a home loan is the most feasible way to realise their dream of becoming a homeowner. Today, you can approach any lender of your choice that offers a loan at a competitive interest rate and get the necessary funds. Whether you repay the loan within the stipulated tenure or prepay the same, you must not forget to collect the NOC document from the lender. It is a critical document that you must get after closing the loan account.
What is NOC?
No-object Certificate or NOC, also commonly referred to as No Dues Certificate is a legal document that you must obtain from the lender after you repay the full home loan amount. The document certifies that you have repaid the entire loan amount, and the lender has no legal rights on the property, and the full property rights are transferred to your name.
Importance of Getting NOC
After you repay the full home loan amount, you must get the NOC from the lender and submit a copy of the same at the property registrar’s office. If you fail to do so, the lender will continue to remain the owner of the property. Unless the lien hypothecation is struck off, you cannot sell the house to anyone.
Apart from getting full ownership of the property transferred to you legally, getting the NOC from the lender is paramount to boost your CIBIL score. When you close the loan account and get the NOC, the lender will update the CIBIL database, and your credit score will automatically increase. Also, owing to the prompt repayment, the lender may mark you as a reliable customer.
Once you are marked as a safe customer, getting a loan in the future becomes much easier. Often, the lenders consider the credit score as one of the important parameters to approve the loan. If your credit score is high, the lender may offer you a discount on the home loans interest rate on the back of your good credit history.
Today, most lenders require you to purchase an insurance cover against a home loan; it is an integral part of the loan application process. When you close the home loan account and obtain the no-objection certificate, the lender will not have any legal rights over the property. This means, in the event of any mishap that leads to damages to your property, the insurer will pay the settlement amount to you instead of paying it to the lender.
Now that you are aware of the importance of getting the NOC from the lender, it would help to know how to get the NOC.
Getting the NOC is simple. After you repay the last EMI and your home loan account is close, you must immediately request the lender to issue the NOC. You can apply for it online through the lender’s website, or you can give a written application for the same at the lender’s branch.
Often people tend to request the NOC but fail to follow-up for the same. But, such carefulness can cost you in the long-run. Make sure that you diligently follow-up for the no-objection certificate. Once you get it, you must carefully check if the loan details are mentioned correctly, and it has ‘no objection’ clearly mentioned on it.
Final Word
The no-objection certificate is an important document that gives you full legal rights over the property. It is also useful when you wish to sell the property or apply for another loan.
